By Shuli Ren

Over the weekend, the elitist Thai opposition Democrat Party said it would boycott the emergency election next February.

The Democrat Party (DP) has a very different view on how Thailand should be run – basically, not a democracy. The opposition has about 35-40% of the votes. Despite massive protester turnouts in DP’s stronghold Bangkok, Prime Minister Yingluck Shinawatra is expected to win again, thanks to her support base in the poorer north.

Election or no election – the political crisis has no end in sight, says Nomura Securities after meeting with political analysts in Thailand:

If the government does proceed with the election, it is likely that the protestors will not stop rallying on the streets as they do not see this as the solution.

However, if there is no election, probably the Pheu Thai government supporters (the red-shirt) would rally in Bangkok, and likely with more anger than the last red-shirt protests of 2010. This could lead to even more intensified violence on the street.

Nomura Securities believes Thailand’s fourth-quarter GDP growth could shrink to 1.2%, as tourists stop visiting. In addition, Thailand is running a current account deficit and the FDI flows are turning negative.

Capital control, though unlikely, has happened in the past, says Nomura:

Capital control is unlikely at this stage but we think the possibility is increasing. Although the BOT has learnt a lesson from 2006-2007 wherein there were capital control measures following the coup, an extreme political outcome from the current turmoil could heighten the possibility of capital control.

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